MeECL is in a mess for delay in power projects and fund diversion: CMD


SHILLONG, April 12: The beleaguered MeECL which is currently in an eye of storm over its inability to provide uninterrupted power to consumers, has a string of factors contributing to the mess. According to CMD of MeECL Arunkumar Kembhavi, the prime reasons for the Corporation’s undoing are failure to commission the power projects and diversion of project grants to meet salary and establishment costs.
To get a clear picture of the complexities in the MeECL, The Shillong Times spoke to Kembhavi who minced no words to share his prognosis for this crisis.
One of the striking facets of the MeECL’s decline is the fact that it has over 400 engineers and technical staff and an army of 4,500 other staff to fend for. This alone accounts for Rs 21 crore, while pension and retirement benefits account for another Rs 15 crore monthly.

Here are excerpts of the interview:
ST: What according to you are the most pressing problems of MeECL today?
AK: There are several pressing problems accumulated over years. Firstly there is delay in closure of several projects for which grants have been given by different agencies. Projects are hanging fire for 10 years and above and no one is bothered to ask why this happens and whose failure is it. For failure to complete the projects grants have been converted into loans.
Since 2010 to 2020 there was no compulsion to pay for the power purchase cost. Suddenly the Ministry of Power made stringent conditions for accessing power from generating companies. So the dues of last 10 years, nearly 1500 crore was to be paid in short time including penalty of 465 crores. Had this payment been made in all those years we would have saved 465 crores. Funds meant for purchasing power were diverted for salaries. Funds meant for paying contractors bills of various schemes were also diverted for salaries. Now we have huge outstanding from companies like NEEPCO who are demanding that payment be made within 3 months. Contractors have been waiting for their payment since 2015.
Previously during winter months no power was purchased to save money. Therefore there was continuous load shedding of 8 hours even in Shillong. This year except for the forced regulation from NEEPCO or Power Grid, we have ensured round the clock supply.
Then there is a question of debt servicing. We are now executing projects worth 2000 crore and none of which is a loan. So instead of taking costly loans for projects like Leshka, Umtru; grants could have been availed. During COVID, there was a moratorium on loan payments till August 2020. Immediately after that we had to suffer huge outgo in terms of loan interest and principal. There was no money to pay even the salaries.
The monthly take home pay of the Chief Engineer is around Rs 2 lakh and the Executive Engineer around Rs 1.5 lakh. The MeECL staff are given a pay revision every five years whereas the Centre and state governments revise pay once every 10 years. In spite of that there is no accountability from the officers, no fixing of responsibility if a project is not completed even 10 years.
For the Corporation to function well, the Board has to have before it the audited accounts and the balance sheet. But in the case of the MeECL there has been no audit carried out for 2017-18, 2018-19, 2019-20. The audit for the three financial years has been completed in the last six months.

ST: What are the facts behind the smart meter canard which the associations allege is a scam?
AK: Firstly, it must be made known to all that the money for the smart meter which will give both the consumer and the distribution company (DISCOM) the amount of power consumed in real time, will not be recovered from the consumer as the amount is a grant from the Asian Development Bank (ADB). There are different types of smart meters – single phase, three phase and LT/CT HT/CT for industries. One cannot divide total project cost of Rs 197 crore by two lakh meters and say that cost of one meter is Rs 10,000. Manipur has recently issued a supply order for a non-smart static prepaid meter costing Rs 5,705 and even MeECL in 2015 had purchased prepaid meters at a rate of Rs 4,500 each. And our domestic smart meter cost is only Rs 3,750. Installing smart meters will hurt vested interests because their commission will be cut and entire money which the consumer pays will come to the kitty of MeECL.
ST: What about the loan sanctioned through the Atmanirbhar Bharat scheme of Rs 1345 crore. How is the money being deployed?
AK: It has to be clarified that out of the Rs 1345 crore loan given to the Corporation to service its debts, the Union Government has already disbursed 50% which is Rs 672 crore to different companies such as NEEPCO, NTPC, Power Grid and NHPC. The money does not come to the Corporation or the state government. The process is on to avail the remaining Rs 672 crore but the same depends on the reforms we undertake.

ST: What are the plans to turn around the MeECL?
AK: We have come up with multi-pronged strategy. At the moment the Corporation is bleeding because 3,19,413 consumers use 1 KW of power when their actual requirement is at least 5 KW. With one KW a consumer can only use one heater. If the 1 KW is converted to up to 5 KW the Corporation will rake in Rs 200-300 crore additional revenue in a year.
Then there are consumers with multiple connections. A consumer in Shillong has 22 connections broken into 1 KW to avoid paying higher tariff. Then there are those with mixed connections. The tariff for commercial complexes is different from domestic users. But people who have a house upstairs and shops in the ground floor also use the domestic line. We have asked all these defaulters to buy a fresh connection. If they don’t then an FIR will be filed against them as their actions violate the Supply Code and Electricity Act.
The question to ask the agitating Unions and Associations is why they have not improved the billing system all these years and plugged the leakages especially in industrial areas, reduced the losses (at 34% we have the highest losses in the country).
In India, for the very first time Narrow Band- Internet of Things (NB-IoT) technology enabled smart meters are being deployed in India. Sad part is vested interests are spreading rumours on all our proposed reforms.
Also out of 6 lakh consumers today only two lakh can pay online. Thousands of consumers are supplied an average bill of Rs 100 per month.

ST: How did it take so long for skeletons to tumble out of MeECL cupboards?
AK: I joined as CMD on September 3, 2020 and spend nearly 12-13 hours in MeECL apart from my other assignments like Commissioner of Taxes and Secretary, Mining and Geology. Recently The Shillong Times brought out issues related to engineers-contractors nexus. But this is a fact known to everyone in the Corporation. I knew it from the very beginning. It’s not turning a blind eye. I didn’t want to indulge in negativity rather focus on the job at hand. Otherwise I would have had to take action against most of the employees in MeECL. Now the issues are coming out in open themselves. I urge the government to put an end to all kinds of illegalities in the Corporation by entrusting the investigation to a competent agency.